I really think the main reason no action has been taken so far to halt the rampant speculation by the likes of GS and MS is to allow them to recouple some of their subprime losses. Think about it. The feds allow them to be considered commercial buyers, so they don't have position limits. The Fed opens the discount window to them. They take that cheap, freshly printed money and then leverage it into futures contracts at eight percent margin. The money pours into their coffers like a torrent while they line up the suckers (such as pension funds) for when the regulations get put back into place.
So Fed policy is screwing us both coming and going. Our paychecks are getting devaluated by the cheap money the Fed is loaning to investment banks ... that they can use to drive up the price of oil and take a bite out of what is left of our paychecks.
Global consumers are bailing out the subprime mess a few dollars per head.
Am I am sure we can trust the Keating 5 Senator with the job of fixing this current problem. We know Obama and the Progressos will just use the manufactured calamity to manufacture consent of the governed to hand over more freedoms. How in the world can anyone logically think that a government almost 10 Trillion in debt can afford to give out free health care ? The next 8 years looks to be rough ones. Hopefully the sane ones will be able to pickup the pieces.
When trading for their own respective accounts, which they do -- heavily! -- GS, Merrill, Chase, MS, et al. are merely ''large specs'', a la any hedge fund or large individual trader.